1. BCC has issued 9 7/8 percent debentures that will mature on July 15, Year 32. Assume that interest is paid and compounded annually. If an investor purchased a $1,000 denomination bond for $1,055 on July 15, Year 1, determine the bond’s yield-to-maturity. Round your answer to two decimal places.
2. Which statement best describes the early exercise of non-dividend paying American options? Early exercise may be advantageous for:
A) both deep in the money calls and deep in the money puts
B) deep in the money calls
C) deep in the money puts